1. COMPENSATION TEAM 10 Presented by Laura Hirvonen Maria Rintala Satu Strömberg

2. COMPENSATION AGENDA Compensation policies Internal and external pay equities Finnish regulations Salary structure Benefit program Management option program Conclusion

3. COMPENSATION All forms of pay and rewards received by employees for the performance of their jobs direct indirect non financial Past effort- future performance Strategic compensation program links compensation to organizational objectives pay-for-performance standard motivation

4. COMPENSATION COMPENSATION POLICIES Competitive base salaries Bonus system 1: MBO –CEO –Country Managers –Functional Managers Bonus system 2: Other bonuses –Regional Managers –Facility Managers – Assistant Facility Managers

5. COMPENSATION COMPENSATION POLICIES (Cont.) Indirect Compensation Open Pay Policy Non Financial Compensation

6. COMPENSATION INTERNAL AND EXTERNAL PAY EQUITY Internal: The job’s worth External: Other employees’ wage rates Internal Factors : Compensation policy Worth of a job Employee’s relative worth Employer’s ability to pay External Factors : Labor market Area wage rates Cost of living Collective bargaining Legal requirements Real Wage Rate

7. COMPENSATION FINNISH REGULATIONS Equal rights law: mandates equal treatment for women in the workplace, includes equal pay for comparable jobs No legislated minimum wage (Työsopimuslaki 17 §) - but law requires all employers - including nonunionized ones - to meet the minimum wages agreed to in collective bargain Right for paid vacation or for vacation compensation Paid day off -Independence Day (388/1937) - Vappu (272/1944) Parents and family take-off

8. COMPENSATION FINNISH REGULATIONS Working hours - 40h/week, not more than 8 h/day - for overtime a permission of the worker is needed - overtime may not exceed 138 h within 4-month-period - daily overtime: pay elevated 50% for the first 2 h and 100% for the next ones - weekly overtime: pay elevated 50% - overtime may not exceed 250 h on a yearly basis - an additional agreement can be made of 80 h a year with the employee - the payment for overtime can be agreed to be changed partly or as a whole to vacation on normal working time

9. COMPENSATION POINT SYSTEM Quantitative job evaluation procedure that determines the relative value of a job by the total points assigned to it –Based on skills, responsibilities etc. required in the job –Point manuals of companies

10. COMPENSATION POINT SYSTEM

11. COMPENSATION PAY GRADES Grade 1: Assistant Facility Managers Grade 2: Facility Managers Grade 3: Regional Managers Grade 4: Country and Functional Managers Grade 5: CEO

12. COMPENSATION RATE STRUCTURE

13. COMPENSATION SALARY RANGES monthly FIM

14. COMPENSATION EXPATRIATES Expats are paid according to their home country’s salary range Premium paid to cover the host country’s cost of living

15. COMPENSATION BENEFITS Flexible benefits package –Core benefits provided in all countries –Employees are able to choose some additional benefits –Additional benefits vary between countries Management option program

16. COMPENSATION CORE BENEFITS Apartment guaranteed Health care Day care Cellular phone Recreational facilities Meal ticket

17. COMPENSATION ADDITIONAL BENEFITS IN FINLAND Company car or company bicycle Fitness benefits Discount on goods and services –purchased from the complex

18. COMPENSATION ADDITIONAL BENEFITS IN RUSSIA Education for children Additional health services Fitness benefits Discount on goods and services –purchased from complex

19. COMPENSATION ADDITIONAL BENEFITS IN BALTIC Education for children Additional health services Fitness benefits Discount on goods and services –purchased from the complex

20. COMPENSATION MANAGEMENT OPTION PROGRAM FOR CEO Uniform Option Arrangement for CEO

21. COMPENSATION CONCLUSION General guidelines for compensation equal in every region Wages adjusted based on the economic conditions Bonus system Flexible benefits package

22. COMPENSATION THANK YOU FOR YOUR ATTENTION! ANY FURTHER QUESTIONS ?